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Question for the Money Doctors

Question submitted on May 23, 2012.

Question

We filed bankruptzy in 2008. How long would it take to improve our credit score?

Answer

First off, I am not an attorney.  However, I have colleagues in the lending business.  And, according to them, bankruptcy will be on your credit report for 10 years. Late payments and unpaid debts will stay on your credit rating for 7 years. Filing bankruptcy doesn't necessarily mean you won't be able to get credit during the 10 years afterward. Many companies will lend to people who have filed bankruptcy, but they may charge you a higher interest rate than if you had not. 

After a bankruptcy has been filed, the sooner you begin re-establishing credit in good standing, the sooner you can expect your credit and FICO score to improve. A good practice is to obtain a secured credit card and continually make all of your payments on time. As time passes and you make payments on time, the impact of the bankruptcy lessens.  


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